Export financing body to open soon<\/p>\n
JAKARTA (JP): The government-sponsored Export Financing Agency
\nwill most likely begin operations in February to overhaul
\nunresolved trade financing issues, Industry and Trade minister
\nRahardi Ramelan said on Monday.<\/p>\n
\"If everything works out fine, God willing, it will start in
\nFebruary,\" Rahardi told reporters in his office.<\/p>\n
He declined to name the bank which would be transformed into
\nthe agency, but confirmed that it would be one of the four banks
\ntaken over by the government in August.<\/p>\n
They are Bank Central Asia, Bank Danamon, Bank PDFCI and Bank
\nTiara Asia.<\/p>\n
Many have suggested that PDFCI is the likely candidate to be
\ntransformed into the financing agency.<\/p>\n
The financing agency, designed to boost exports, will focus on
\nproviding subsidized, reshipment working capital and export
\ncredits for exporters to maintain production.<\/p>\n
The agency will provide guaranteed short-term export financing
\nand export insurance, as well as operate as an export information
\nand data center.<\/p>\n
Local exporters have been having trouble financing their
\nimported materials because foreign banks have rejected letters of
\ncredit (L\/Cs) issued by the country's beleaguered banks.<\/p>\n
Although the government has guaranteed local L\/Cs, local
\nbanks, facing mounting bad loans, remain reluctant to issue L\/Cs
\nto exporters unless they have cash collateral.<\/p>\n
Rahardi said the government was currently in the process of
\n\"cleaning up\" the appointed bank.<\/p>\n
\"This process is still ongoing, but we do want a bank that
\nalready has the infrastructure, human resources and ability in
\nmaking transactions,\" he said.<\/p>\n
Rahardi admitted that he had not been able to resolve trade
\nfinancing problems faced by export-related industries since he
\ntook up the ministerial post in June.<\/p>\n
\"Since I became a minister, none of the trade financing
\nschemes we designed have worked so far,\" he admitted.<\/p>\n
He said the problems would not be resolved without the
\nrecovery of the beleaguered banking sector.<\/p>\n
Currently, many export-related companies are having
\ndifficulties financing their imports of raw materials, except for
\nthose affiliated with foreign companies.<\/p>\n
Rahardi said he was determined to boost exports, because many
\nproducers focusing on the local market would have to shift their
\nmarket orientation as the local market would remain sluggish next
\nyear following low economic growth.<\/p>\n
The government has estimated economic growth will reach
\nbetween minus 1 percent and plus 1 percent next year, compared to
\nminus 13 percent this year. (das)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/export-financing-body-to-open-soon-1447893297",
"image": ""
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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